Use compulsory licence as “nuclear option” 

A compulsory licence should be viewed as a “nuclear option”, said Patrick Kilbride with the Global Intellectual Property Centre, touching on a sore point in Indo-US trade relations.

An exclusive option mandated by the World Trade Organisation (WTO), a compulsory licence (CL) should be used only in a health emergency, he explained.

But India is “not completely compliant with the WTO” when it comes to the CL, since it was not within WTO mandated criteria, Kilbride, GIPC’s Executive Director (International IP), told Business Line.

India had granted its first CL in 2012 to Hyderabad-based Natco, allowing it to make a less expensive version of Bayer’s advanced kidney cancer drug Nexavar, on the payment of royalty to the innovator.

The move caused much anxiety among multinational companies. But what unsettled them further was the possibility of more CLs being issued on a handful of cancer drugs to make it affordable.

There needs to be a moral and economic rationale for issuing a CL, points out Kilbride. But it seems to be more a political statement than to address access, he added.

The GIPC, under the US Chamber of Commerce, has been in the thick of the IP debate as its annual international index rates the IP environment in different countries. Out of 30 countries this time, India inched up to 29, ahead of Thailand in the last place.

India continues to fare poorly on its overall IP resolve and the lack of willingness compounded by perceived “governmental and administrative bias” seen in individual decisions is holding companies from bringing new products into the country, he said.

The new Government’s statements on IP, though has changed the perception of bias and stemmed the sliding situation, he said, adding however that it would take time for political commitments to filter down.

Patents protect innovative products for 20 years, keeping competition from copying or selling similar products. In the process, the original research work, data etc (intellectual property) generated also gets protected.

And in the case of medicines, public health advocates caution that such protection could lead to medicines being priced beyond the reach of patients.  

“Apples and oranges”

Increasingly, industry-watchers have been poking holes in the explanation of drug companies that drugs are priced high to help recoup investments in research.

Economist Jeffrey Sachs recently singled out Hepatitis C drug Sofosbuvir as a “poster child” of the US healthcare system that was being “bankrupted by greed, lobbying and indefensible policies on drug pricing.”

Responding to the cost of healthcare debate, Kilbride said, it is critical for Governments to look at the immediate healthcare needs of its people, especially if the population is large and with limited resources. The need to lift people out of that economic situation cannot be ignored, he said.

But IP is not the barrier in accessing medicines, he said, adding that patent protection and drug pricing are like discussing apples and oranges.

Conversations on IP seem to begin and end with price, he said, adding that it means more. It allows small companies to take risks and get capital and investors to help it grow.

The argument is often made that 80 per cent of patents in India are issued to international companies - an indication that the system works. It should be the other way, he said, adding that local companies need to demand a policy that protects their work.

In fact, this is where China edges past, he indicated, as China has invested in IP, “pioneered” an IP Court and was seeing more domestic players demanding such protection.

jyothi.datta@thehindu.co.in